Maynard Webb's next big thing: homeshoring

When Maynard Webb retired as chief operating officer of eBay in August 2006, he was widely viewed as one of the top technologists in Silicon Valley. Famous for saving the online auction house from several critical computer meltdowns, Webb had also built up substantial good will by sharing his expertise with other companies.

But Webb's next move puzzled some of his peers. In December 2006, he accepted an offer to become chief executive of LiveOps, a San Jose company that specializes in managing home-based contract workers who staff virtual call centers.

Webb, 51, had agreed to visit LiveOps earlier that month as a favor to his friend Bill Gurley, a venture capitalist who had funded eBay and LiveOps. The offices were dark and dingy, but the vision of the founders lit up Webb's imagination. "This is transformational," Webb remembered. "This is where the world is going and the way work will be done."

Call centers are usually associated with low-wage drudgery, not high-tech wizardry. Their greatest costs aren't super-sized servers that slurp up electricity, but desperate people begging for bathroom breaks.

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LiveOps, however, was surprisingly similar in spirit to eBay: Its founders wanted to give call center workers freedom to work at home, as eBay did. Using cutting-edge technology and sophisticated algorithms, LiveOps is able to route calls to its 20,000 home-based contract workers on behalf of companies such as Pizza Hut, Medtronic and NationsHealth, among others.

LiveOps also uses eBay-style feedback to rank each worker's performance; LiveOps directs calls to the top performers, rewarding them with more work.

The trend of using home-based workers, known as "homeshoring," is booming. According to research firm IDC, there were about 112,000 homeshored jobs in 2006. Currently the number is 200,000, mostly in the United States. By 2012, the figure "should grow to well over 300,000," said Stephen Loynd, a program manager for contact center services at IDC.

Loynd said the homeshoring trend is being fueled by improvements in technology and the increasingly high cost of commuting, among other factors.

In addition to boutique call center companies like LiveOps, Arise Virtual Solutions and Alpine Access, among others, companies like JetBlue Airways have embraced the homeshoring trend, along with major customer care providers such as West, Teleperformance, Convergys and TeleTech.

But the competition doesn't appear to be slowing LiveOps.

In addition to managing its 20,000 independent contractors, LiveOps also is selling its technology platform to companies like Salesforce.com and Vforce that want to manage their own home-based employees. And Webb has plans to expand beyond call centers — he believes any kind of remote work can be done using this model, including software development and medical transcription.

Though LiveOps is private and doesn't disclose revenues, Webb said annual revenues have jumped from $60 million when he joined to well over $100 million. While companies like Google and IBM are trimming staff and cutting expenses, Webb is so far ahead of his annual plan, he said he's "trying to decide what to do with the extra money."

The Webb file

Webb himself sounded a bit surprised saying this; he's used to having success come the hard way.

Compact and muscular, Webb turned down a football scholarship to the U.S. Naval Academy in Annapolis, Md., because he didn't want to end up fighting in Vietnam. But that choice didn't leave him a lot of options. His family was poor and couldn't help him out with tuition, so Webb went to work doing manual labor, including a stint with a pest control company.

"My job was to turn on the poison gas and run fast,'' he joked.

Webb put himself through Florida Atlantic University, getting a degree in criminal justice that led him to a job as a security guard at an IBM facility in Rochester, Minn. He wanted to work with computers, so he talked himself into a computer security job at the company, basically hacking into its computer systems checking for vulnerabilities. In one escapade, he cut himself a $10 million check by masquerading as three different managers. (He gave back the check.) Later, IBM put him in charge of payroll at its PC division in Boca Raton, Fla. Webb soon developed the reputation as the guy who would take jobs no one else wanted. Every year came another impossible assignment, and every year another promotion.

The experience made Webb a champion of meritocracy.

He said he's proud that LiveOps can offer jobs in areas of the country where there aren't many, and that people who work hard can make a decent, if modest, living. Agents are paid 25 cents a minute—- or $15 an hour — taking calls for customers of companies that sell everything from pizzas to cosmetics to magazines.

If a home-based call center worker can persuade a person to buy an additional product, they'll earn more, potentially boosting their take-home pay to $20 an hour. Workers who are not productive are weeded out.

Webb said he's hiring 150 to 500 new contractors a week from a pool of as many as 10,000 applicants.

Initially, the LiveOps model attracted a lot of stay-at-home mothers, military spouses and college students. But as the country's economic woes have deepened, people from all walks of life — and increasingly, retirees — are applying.

For example, Ted Kinney, 42, started working for LiveOps in the fall, after retiring from the military as a recruiting sergeant. He looked for work near his home in Harrisburg, Pa., but couldn't find anything. "I was pretty down on my luck" he said.

Freedom of work

When Kinney discovered LiveOps on a Web search, he figured there was some catch. "I was very skeptical," he said. LiveOps contractors not only work from home, they also set their own schedules in half-hour increments — meaning they can schedule as many breaks as they want.

Kinney said he likes the freedom of being in control. He said the LiveOps income supplements his retirement from the Army, which after taxes is only $1,500 a month.

Webb said his next challenge is to add jobs that require higher skill levels and pay better. He also recognizes that his workers need health care and other benefits, which LiveOps doesn't offer.

"I would love to find the economics that work for that," he said.

For his part, Webb is staying focused on finding better ways for people to work at home.

"I'm not confused about where the world is going," he said. "The world is going here in spades."